Financing Difficulties for an investor loan to get 2nd property

[Steven Clevenger]

Hello all,

I have been having trouble acquiring a investor loan line of credit to acquire my second property. My credit score is good(750) and I have enough for 25% down on a 250K home(which is the price point I am looking around). The trouble seems to be 3-fold.

1)I sublease the rooms in my primary residence and it covers my mortgage + ~$500 a month, so overall an excellent cashflow and I have had zero vacancies in the 18 months I have owned the home. Thus far lenders have said this income "doesn't qualify" even though If I rented the entire home it would.(seems arbitrary and stupid)

2)My primary income is ~60k salary income but I have contractor based income that amounts to about another $4000 a month(I understand that I can't count this per se as its variable and less than 2 years for the contractor income) 

3)I have medical school loans that are currently in deferment, I am on the 10 year IBR so my loan balance will be forgiven tax free in 6 more years. Though they are currently in COVID deferment I acquired a letter from my loan servicer indicating if I did put the loans into repayment it would only be ~$300 a month. However the one underwriter I worked with thus far insisted on counting 0.5% of the loan balance per month against my income in spite of having assurance from my loan processer and this is in no way reflective of the reality of my loan situation. 

My question is how do investors get around these issues? As I understand it most real estate investors have loads of debt and income that is not salaried. Am I just asking for money from the wrong mortgage underwriter?